At the end of December last year, Togo’s public debt was XOF2,191 billion according to a recent report released by the Ministry of Finance. This is nearly 74% of the country’s GDP. 

The national public debt committee which wrote the report indicates that 73% of this debt is denominated in the local currency while 27.% is in foreign currency. According to the document’s author, this makes the debt less exposed to exchange rate risk.

However, the committee notes that while the risk is minimal, “external debt portfolio is still influenced by the fluctuations of some currencies like the US dollar (32%), the Yuan (27%) and Special Drawing Rights or SDR (21%).”  Hence, a too high depreciation of the US dollar against the Euro could augment medium-term debt.

“A 30% depreciation of the dollar against the Euro would deviate debt-to-GDP ratio from an estimate of 59.89% in 2023 to 63.91%,” reads the report.

Regarding outstanding domestic debt, denominated in the local currency, it stood at XOF1,597.8 billion at the end of December 2018. Meanwhile, external debt, denominated in foreign currencies, was valued at XOF593.2 billion.

By 2023, in line with Togo’s medium-term debt strategy, external debt should constitute about 45% of public debt whereas domestic debt would represent the remaining 55%.

At the recently held Togo-EU forum in Lomé, 141 projects (out of 407 submitted) were deemed bankable and secured XOF852 billion worth of commitments from investors.

There will be a continuous follow-up of the projects, assured both the government and the European Union and while the latter says it will make sure all selected projects get funding, Germain Mèba, president of Togo’s chamber of commerce and industry (CCIT) calls out to local banks to get involved.

For his part, minister of trade, Kodjo Adedze, added that particular attention will still be given to all 266 projects which were not selected during the forum as he believes they have the potential to create wealth and jobs, in line with the country’s national development plan.

Séna Akoda

Togo’s economic growth in 2018 was 4.9%, thus exceeding forecast by 0.1%.

This was disclosed in the BCEAO’s latest report on monetary policy across the West African Monetary Union (WAMU).

According to the institution, the rise was spurred by a greater agricultural output in the 2018/19 campaign.

Moreover, an improved growth in Togo, and Niger, during the first quarter of 2019 has partially cushioned drops in Côte d’Ivoire, Mali and Senegal.

Economic growth across the WAMU was sustained in 2018. From 6.6% in 2017, real GDP growth stood at 6.5% last year. This is mainly attributed to the tertiary sector.

Ayi Renaud Dossavi

Last Friday, Togo closed its operations on the regional financial market for the first half of the year.

The country’s last operation for the period is a three-year maturity bond issuance. It successfully raised XOF22 billion (while it sought XOF20 billion initially) in the process; proceeds will be used to finance expenditures set under the 2019 State budget.

In detail, total submissions amounted to XOF40.2 billion, thus representing a coverage rate of more than 200%.

With this last issuance, Togo’s treasury raised on the concerned market a total of XOF211 billion in H1 2019. During the second half, the country intends to raise about XOF200 billion, including XOF130 billion in bonds. Togo also considers negotiating by September 2019, a loan from the international lending market, maybe via a Eurobond.

Togolese minister of trade and private sector promotion, Kodjo Adedze (photo), announced the government has secured investors’ commitment to the project to duplicate the Unity Highway (l’Autoroute de l’Unité). This was during a press brief on the Togo-EU forum the country held last June 13 and 14.

The extension of the highway was decided to ease traffic flow on the Lomé (Togo)-Ouagadougou (Burkina Faso) corridor that connects hinterland countries. It will also strengthen commercial trade through the decrease in transportation delay and costs on the corridor.

The value of commitments has not been revealed, but the government is targeting to raise more than €6 billion for all structural projects in the National Development Program, as part of the Togo-EU forum. This implies that the road extension, which requires $620 million (less than €550 million), is expected to be fully financed by the promises made by investors.

Let’s note the project is in line with Togo’s vision to be a logistics hub in the West African sub-region.

Séna Akoda

The International Monetary Fund (IMF) has allowed a slight increase of Togo’s budget deficit. A true relief for the country struggling to increase internal revenues while social expenditures keep growing.

“A temporary increase in the fiscal deficit is warranted to accommodate some urgent spending. Notwithstanding this relaxation of fiscal targets, Togo is projected to remain within the WAEMU deficit criterion (ed.note: 3%) in 2019 and 2020,” said Tao Zhang, Deputy Managing Director and Acting Chair of the IMF’s Executive Board. This was at the end of the fourth review of Togo’s economic performance under a program supported by and Extended Credit Facility (ECF).

Togo, it should be noted, spends more than 40% of its budget to service debt. Recently also, it launched its National Development Plan, for about XOF4.6 billion. After securing part of this amount from the regional market, the nation is expected to seek €500 million on the international market by September 2019.

In this regard, though the IMF insists that improving social spending efficiency should be a priority, the institution warned against widening of fiscal deficit following the international operation. It indeed emphasized on the need to “increase permanent revenues to preserve the hardly achieved budget improvement and preparation of an adequate budget space for social and infrastructure spending.”

In 2016, Togo’s fiscal deficit stood at 9.6% of GDP. The two following years, it was at 2.1% and 6.7% of GDP respectively. This year, which is a year before the WAEMU 3% criterion comes into effect, it was forecasted to improve to 1.6%.

Last year, the country soared 19 places in the Doing Business Index, spurred by major improvements in the business environment.

Fiacre E. Kakpo

Togo’s government implemented yesterday at a ministers’ council a WAEMU guideline relative to ethics and deontology in public services and public procurements.

The decision is explained by failures to fight malpractices and inappropriate behaviors relating to the procurements. The government hence wishes to better the latter and improve on public service delegations.

In the long term, the adoption of the measure should boost transparency in both public finance management and public procurement processes. In this framework, “every public servant found to have intentionally or by negligence infringed any of the guidelines will be sanctioned accordingly.”

Séna Akoda

In line with its quality policy (ECOQUAL), ECOWAS wants to primarily certify the following five products: cashew nuts, vegetal oil, cement, water and fish.

This is to ease access to safe products and services, which meet set standards, in West Africa. According to Commodafrica, it would also allow buyers, sellers and other concerned parties to easily reach agreements regarding standard assessment processes in the region.

With regard to this last aspect, the initiative aims at ensuring that “firms meet quality standards as this would benefit not only them by making them more competitive, but also by protecting consumers and the environment,” says Yaya Niato, representative of the ECOWAS commission in charge of business promotion and private sector.

This measure arises in a context where Togo, it should be highlighted, eyes a cashew output of 24,000 tons this year.

Ayi Renaud Dossavi